Manhattan real estate is a funny business: the curious case of the Lower Soho loft at 49 Howard Street
loft takes 3 years to contract, data are hard to track (sigh)
If you took a look at the Past Activity tab on the StreetEasy building page for 49 Howard Street (aka 307 Canal Street) you wouldn’t know that the deed reflecting the very recent sale of the “1,813 sq ft” loft #4S for $1.6mm has been a long time in the making. After all, when you scroll down you see marketing activity dated April 26, 2010 at $1.4mm “off-market”. Click on that “#4S” and you might miss the “active listings: #4S” hyperlink, which finally brings you to an “in contract” listing with a long, tortured and misleading history that is evident on the Overview tab on the StreetEasy building page … but who looks at “Current Listings” when StreetEasy has a deed record?? One point being, I hope this glitch in tracking listings on StreetEasy is not an example of Zillowification. Another point being, like my mind, data integrity is a terrible thing to waste. Let’s start by unpacking the “current” (ha!) listing that just sold.
For purposes of counting days on market on the Master List of downtown Manhattan loft sales between $500,000 and $5,000,000, I use 90 days as (an arbitrary) the longest period a loft can have been off the market (long story, short, any reasonable system must allow for some days off the market, in my opinion). Hence, loft #4S is carried on my list as coming to market on November 30, 2010 because it was on the market continuously after that (indeed, with no breaks at all, let alone a break of 91 days or more after that) leading to the sale 2 weeks ago. (Ignore, for the moment, the StreetEasy “[l]isting is no longer available” dated March 13, 2013, which I will explain below.) In human terms, however, note the prior history, when the loft was offered for sale from May 7, 2008 until April 26, 2010 (with two short periods off the market in those nearly 24 months). Thus, you could look at this remarkable journey as lasting from May 2008 until January 2014, with the loft being off the market for only 10 of those 68 months. Funny business, indeed! Let’s look at the loft before coming back to that remarkable journey with a table, and more ….
seller lived in this loft backwards
There are 11 listing photos of loft #4S, nearly all of which catch at least a corner of the bed. In a loft that claims “1,813 sq ft” that’s a strange focus, but the fact that there are no kitchen photos is a hint that most buyers would view this as a renovation project. That, and the broker babbling “[c]reate your own layout or keep the floor plan completely open”. The floor plan used to market the place is likely, therefore, to be a proposal, with a “bedroom” across the (dark) back wall of the loft (note also the “L” kitchen in the plan, which is not evident in the photos). As 9 listing photos tell us, the sellers put a bed up front near the 3 windows. It is (still!) a free country, so you can sleep wherever you want (especially in an open loft), but this choice is unconventional. Not only do you see the bed from everywhere in the loft, it sits about 4 feet from the edge of the kitchen (see, especially, listing pic #11).
I get it that some folks just don’t want to sleep without windows, but if you zoom in on the map (or consider the alternate address) you know that south windows in a loft spanning from Howard to Canal face Canal. Judging from the absence of babbling about finishes and the overall look of the loft, those 3 windows about (35 feet?) above Canal Street must bleed a fair amount of ambient noise, from an environment characterized by 24 hours of traffic heading between the Holland Tunnel and Manhattan Bridges (taxis and buses and trucks, oh my!), with evening rush hours especially … er … ambient.
The loft would be a classic Long-and-Narrow but for the stub gallery leading from the entry way back in the rear. All the plumbing seems to be on the long west wall and, as mentioned, the only 3 windows face south. Maybe the kitchen can be moved back (north), in which case you could have a kitchen / dining area at the (dark) north end, one or two (interior) bedrooms (one a master, en suite), and an open living area in the light and
ambience noise afforded by Canal Street. Bet you a quarter the new owners put at least $300,000 into the space and another quarter that they don’t sleep on Canal.
a flippin’ dream, unfulfilled
The interesting thing about the fact that the recent seller tried to sell as early as May 2008 is that he bought it in February 2008 (for $1,425,550). Our listing system notes that this building was a rental before converting to condominium, so it’s possible that the guy lived there before it was a condo. The full history of the loft suggests not, however, as he (while trying to sell) rented the place out a year and a half after buying it. That full history also suggests that he didn’t make much money on the flip, even though selling at $1.6mm that for which he had paid (only) $1,425,550. The long-promised and long history would be timely here:
|Feb 5, 2008||sponsor sale||$1,425.550|
|May 7||new to market||$1.7mm|
|April 23, 2009||(for rent)||$6,000|
|Jan 11, 2010||back on market|
|Mar 16||back on market|
|April 26||off the market|
|Nov 30||back on market||$1.5mm|
|Feb 17, 2011||$1.45mm|
|Oct 27, 2012||$1.42mm|
|Mar 22, 2013*||contract|
|Jan 10, 2014||sold||$1.6mm|
That’s a lot to unpack!
First, you have a sponsor sale at The Quarter Formerly Known As The Peak (even though a sponsor sale, that is pretty close to fairly representing that market, as our system has that contract signed as of October 23, 2007). Then you have the nearly immediate attempt to flip at a price treated as fanciful, at which the erstwhile flipper held through the nuclear winter and dropped only after he had rented the loft in August 2009, when the overall sales market in Manhattan had thawed. Then the long period of being ignored by The Market (except when off the market for 6 months) at prices bumping up to $1.5mm and zigging down to $1.375mm. My asterisk has the contract date in our listing system and ignores the subsequent history in StreetEasy before the deal closed two weeks ago, as that history is not compatible with there having been a contract signed in March 2013.
From StreetEasy, the loft went off the market in March (instead of into contract), then came back in November at $1.6mm, then found a contract by December 29 that closed January 10 at that $1.6mm. But there’s no indication in the inter-firm data-base that anything happened between the contract (again, March 22) and the closing. If the intra-industry reporting is correct, the loft took a very long time to close after that contract and it closed 13% above ask … after that tortured history. While odd, that seems more likely to me than that it came back in November and then went to contract a month later, with the same REBNY member who had earlier kept the REBNY system up to date bit who (this time) did not (if StreetEasy is correct). I don’t believe it.
Whether I am right in relying on the REBNY system or StreetEasy is right (from what source??) is a maddening bit of uncertainty to anyone who cares about transparency. (Hint: that should be you.) Forget questions about efficient or rational markets vic we don’t have correct data. Either the loft sold well above ask (above every asking price over nearly 6 years other than the first one) and for some reason took almost 10 months to close, or the loft sold exactly at a new asking price that was not circulated among REBNY firms and then closed within 2 weeks. Neither scenario is logical, but one (at least) is not factual. You can believe what you like, but you must agree that this state of data uncertainty should be embarrassing for any self respecting real estate trade group, and would not be tolerated in the smallest MLS in the land. (Sigh)
flipping a loft neither for fun or profit
From the top-line numbers, the IRS would have little interest in this guy and this loft. He sold at $1.6mm after buying at $1,425,550, a gross gain of $174,450. This is well under the individual non-recognition of gain if this was his primary residence at the end, but wait … there’s less. Of course he paid a brokerage fee on the sale (6%, per our listing system, or $96,000) and state and city transfer fees on the way out (1.825% = $29,200), so there’s not much left anyway. And we now the guy was at it for more than 5 of the last 6 years, so there could not have been much fun in that.
You’d have to look at that 2009 rental listing again to catch the punchline:
This SoHo loft was “gutted” in late February.
I have no idea what condition the loft was in when purchased from the developer in 2008, except (a) it costs $1.425mm then and (b) had not yet been gutted. Meaning, the 2008-buyer-(eventually)-(a-long-time-later)-turned-2014-seller gutted it after buying it. One has to wonder why he did that, given that the result was a 1-bath open loft with no finishes worth bragging about, but (as the headline says) Manhattan real estate is a funny business.
Just for fun, let’s assume he paid at least $49,250 for the demo and (mild) rebuilding. That brings his net gain (counting only the prices, transfer fees and sales fee on exit, demo + build-out) to … zero dollars and zero cents. No profit there, and less fun.
Manhattan real estate is a funny business. (Ahem)
been here before, of course
This post has gone on long enough, so I won’t do much more than link to my last post about sales in this building. Check that November 11, 2010, nice flipping loft at 49 Howard Street, for a slew of cool angles, including a bleak block history and a Scorsese film name check, a deep dive into the residential history of the building (insider prices!), a graffiti artist book link, a YouTube video of an odd tour in the building (with Italian audio), and a bathtub in a bedroom. Fun stuff, but too much to get into this long into a long post … so: That is all.